Market Conditions: August Sales Surge 23.6% YOY As The Rebound Continues
As most of the preliminary data has already shown, August sales in Chicago jumped another 23.6% year over year. The median price was also ticked higher.
From the Illinois Association of Realtors:
The city of Chicago saw a 23.6 percent year-over-year increase in home sales in August 2012 with 2,209 sales, up from 1,787 in August 2011. The condo market in the city of Chicago continued to show robust sales increases, with a 35.9 percent increase from the 1,027 sales in Augsut 2011 to the 1,396 in August 2012. The city of Chicago median home sale price for August 2012 was $200,000, up 3.9 percent compared to August 2011 when it was $192,500.
The city of Chicago has seen 14,280 homes sold through August 2012, versus 11,992 sold through the same period in 2011.
Here is the data for the last 5 years:
- August 2007: 2923 sales
- August 2008: 2078 sales
- August 2009: 1927 sales
- August 2010: 1486 sales
- August 2011: 1787 sales
- August 2012: 2209 sales
Median home prices over the last 5 years:
- August 2007: $305,000
- August 2008: $297,500
- August 2009: $229,900
- August 2010: $200,000
- August 2011: $192,500
- August 2012: $200,000
Chicago condo sales for August:
- 2007: 2,246 sales
- 2008: 1489 sales
- 2009: 1,239 sales
- 2010: 876 sales
- 2011: 1052 sales
- 2012: 1396 sales
“Continued signs of a turn-around are a reality in Chicago, as homes are selling and prices are stabilizing,” said REALTOR® Zeke Morris, president of the Chicago Association of REALTORS® and Operating Principal and Managing Broker, Keller Williams Realty, CCG. “We will, however, continue to monitor the city’s condo market, as pricing seems to lag by comparison to the single-family homes. The health of the condo market relies on many factors, among them, the viability of individual condo associations, which often can make or break a deal, with negative repercussions for buyers seeking financing.”
The foreclosure pipeline appears to be clearing- even if it’s slowly.
Dr. Geoffrey J.D. Hewings, Director of the Regional Economics Applications Laboratory of the University of Illinois, said among trends emerging in August was how foreclosed properties are beginning to work through the court system. He said the data suggest foreclosure resolutions delayed until February as federal and state governments and banks worked out a settlement over mortgage lending irregularities are now “clearing the market more rapidly than new additions.”
“The August data show that it will take less than three years to clear the active inventory, a further indication that the backlogs are declining since in April it would have taken 3.28 years to clear the market,” Hewings said.
Is the “lag” in the condo market just another indicator that condos will be out of favor for buyers in the near future?
Will these year over year sales gains continue this fall – as inventory remains tight?
August home sales in Illinois up 23.7 percent from a year ago; Statewide median price at $147,000 [Illinois Association of Realtors, Press Release, September 19, 2012]
Pros, is it safe to say that it’s gonna be good timing to buy condo Loop/River North/Gold Coast in the following one year or two?
Thanks a lot
^^ Sure why not, if you have stable employment and life situation, go for it! Affordability hasn’t been this good in nearly 40 years
And bob, isn’t it time for you to buy? I seem to recall your y/y % price increase without government intervention was your time to get in the game….
” I seem to recall your y/y % price increase without government intervention was your time to get in the game….”
i hope you’re joking.
government intervention is alive and well and larger than ever before.
“I seem to recall your y/y % price increase without government intervention was your time to get in the game”
C-S, not IAR bs median, influenced by unit mix. Which well may happen, but likely to be followed by a winter of yoy decreases. Bob’s totally a Feb-Mar buyer, anyway, looking for someone desparate to sell in the middle of winter.
“The foreclosure pipeline appears to be clearing- even if it’s slowly.”
are you sure? didnt they just lift the moratorium (sp) so now you will see more homes being foreclosed on?
also from 5 people i know wanting to buy are saying the inventory suck ballz so they are going to wait another year. that think has to hurt the market going forward.
Arent we on QE6 or something now? artificial stimulation is only a mask.
Just as the housing bust was totally predictable, so is the recovery. There is nothing shocking about this news. By 2014-2015 we will probably be back to “normal” and the stage will be set for another boom in 2016-2018. Again, nothing new –
“government intervention is alive and well and larger than ever before”
yes that is true but I’m curious what bob has to say… I mean don’t fight the fed… if he wants to buy in feb-march, he better start lookin now!
“the stage will be set for another boom in 2016-2018”
If you mean period of growth where the average sale reflects an increase over previous purchase price and covering transaction costs, I’ll agree with you. If you mean boom like we saw in the 2000-2008* I don’t think we’ll see crazy increases like that for a long, long time. A boom like that occurs once every other generation.
* or whenever the official Boom occurred.
This data is strong. I don’t think prices are going to increase dramatically but in my hood (OTT) ten places have sold above $1mm in the last 6 months. Some of those places have sold at or slightly above 2005-7 levels also. If you have a stable job situation and know you want to live here for 5+ years its a great time to buy.
“if he wants to buy in feb-march, he better start lookin now!”
He’s always looking, hence the updates on crap-row condos, and the occasional links to places in Bridgeport.
The 14th month of year over year increases and the 6th month of double digit increases. Continued strong contract activity, suggesting more of the same for the next few months. Less than a 6 month supply of inventory and 34% distressed sales. I’ve got all the long term trends here: http://www.chicagonow.com/getting-real/2012/09/chicago-home-sales-continue-the-winning-streak-in-august/
Thanks to G for supplying all the long term sales data that has allowed me to create a “pretty graph”.
Where’s crap row? I’m guessing soutside
In my neighborhood, after about 4 years of absolute stagnation (in terms of home building), they have just broken ground on 8 new houses – even I would never have predicted this.
“Where’s crap row?”
Anyplace you get 3 nearly identical mccrap box condo buildings in a row. Like Sheffield just north of Wellington, which Bob just commented on last night.
“Anyplace you get 3 nearly identical mccrap box condo buildings in a row.”
You know, anon – you probably are the biggest elitest snob on this site – yet nobody ever seems to call you out on your superiority complex. Amazing….
“You know, anon – you probably are the biggest elitest snob on this site – yet nobody ever seems to call you out on your superiority complex. Amazing….”
miumiu gave him a run for his money, but now that she’s gone…
Just kidding MM, come back soon. We miss you!
“yes that is true but I’m curious what bob has to say… I mean don’t fight the fed… if he wants to buy in feb-march, he better start lookin now!”
Bob called sub 90 case shiller at one point, so unless he gets just hte right deal that he doesn’t think he could get in the future, he’s got some waiting left.
Oh I thought bob had a love for Motor Row as well… was wondering why you would call that area crap row
I’m running about 50% purchases right now which is a huge shift from the last three years where the mortgage business seemed like 90% refinances/10% purchases. Refinance volume is still high, but there is a noticeable increase in purchase business.
It remains to be seen how long it lasts though…
“don’t fight the Fed”
the Fed is going to destroy itself. no need to fight them.
“Pros, is it safe to say that it’s gonna be good timing to buy condo Loop/River North/Gold Coast in the following one year or two?”
If you’re trying to “time” a purchase of a condo in locations like those, and need to ask “pros” whether buying the following year or two is the right time to pull the trigger, you’re seriously doing it wrong.
Projected employment growth in the Chicago metro area is pretty bad at 0.6% for the next 12 months. How is this going to help out with the for-sale housing market? Also, are incomes rising here? Any personal perspectives to share?
“Also, are incomes rising here? Any personal perspectives to share?”
I’ll share a little anecdote from NY.
Two friends just moved into a 2/1 rental in Harlem.
The apartment has potential and they got a great deal, but it is FILTHY after several transient room-mates cycled through it over the years. The last two room-mates to live there were an aspiring hip hop artist in his late 30s and a Ukrainian girl who came to NY, could not find work and sadly returned home.
The linoleum kitchen floor is black with grime and they have roaches. It came furnished with hand-me-downs and those need to be scrubbed down along with the wood floors and walls. Surprisingly the bathroom is clean – don’t ask me how!
My friends need help.
I’ve been trying to help find them a house cleaner for a one-time job of washing everything down and I can’t find anyone. Everyone’s cleaners are booked up, aren’t taking on additional jobs or don’t want to go as far Uptown as Harlem even though it’s a convenient location close to 4 trains. I even asked our cleaning guy at work and then promptly had to cut him off because he got greedy and tried to shake my friends down.
It’s a one-time job for good cash for a few hours and no one wants to do it.
It seems that house cleaners in NY are not hurting for work and they aren’t hungry enough to take on a job where they’re actually going to get their hands a little dirty.
Honestly, I’ve cleaned much worse all by myself in my Chicago apartments.
I’m about ready to do the job myself since my salary keeps getting cut each year.
“Just as the housing bust was totally predictable, so is the recovery. There is nothing shocking about this news. By 2014-2015 we will probably be back to “normal” and the stage will be set for another boom in 2016-2018. Again, nothing new -”
Clio, you might want to start studying the Fed and its inflationary monetary policies, “QE” which is buying USTs to support the deficit spending, study the debt load, debt ceiling, another potential downgrade. Some are saying it’s different this time, than it was in 2002 when the Fed pumped money to rescue the US economy from the dotcom crash and 9/11. Some are saying, that “this time” the Fed is pushing on a string and cannot produce the results you are talking about. I don’t know what’s going to happen.
Milkster: you friends should clean their own damn apt. not rely on illegal aliens. For every American that relies on illegals to save a few bucks….guess what? That illegal has an extended family/offspring that you don’t see that’s overburdening schools, ERs, food pantries, hospitals, prisons, welfare offices, WIC, SNAP, and many other things. People who hire illegals are helping to bankrupt the country.
Milkster, are you currently living in NYC? NY real estate with rent controls, smaller land, and insane prices, are a whole different animal than Chi and thus hard to compare
Danhofer –
I agree with you on illegals.
My cleaning guy at my office who tried to squeeze my friends is not illegal though!
He belongs to a union.
Hi Inquisitive –
I live in NY and Chicago.
Yes, I agree with you too on the NY real estate market.
My comment was on the general job market though and the fact that I can’t get anyone to do a dirty job for good cash.
“cleaners. . .don’t want to go as far Uptown as Harlem. . .”
In what parts of Manhattan are cleaners living these days, such that they’re disinclined to go as far up as Harlem?
Cleaners have no desire to do one off jobs and I don’t blame them either. At least with a regular cleaner, you get to know them and they keep the house in nice shape every couple of weeks. I can’t imagine going in and cleaning a disgusting place for a pittance.
Thanks for your support, Jenny.
I wouldn’t call a couple hundred bucks for a morning’s work a pittance.
And if that’s your line of work to begin with, what’s the difference?
Milkster, i’m sure you can find a groupon or living social for half off one time cleaners.
Milkster:
No idea if they’re actually any good (and they only go to 110th, so may not work), but:
http://www.wizardofhomesnyc.com/
has a “filth cleaning” service with 2 people for $100/hour. Description is:
“Be honest: if your apartment has never been cleaned, you havent taken out the trash in months, the dishes are piling up and neighbors are complaining about the smell then a basic or deep clean will not be enough.
Don’t order a deep clean or basic clean, hoping we’ll just deal with your mess and do miracles in a few-hour slot that we’ve been given. Please be respectuful and warn us about the current state of your apartment. You could even send us pictures so we come prepared.
We do reserve the right to walk out if you have ordered a basic/deep clean for an apartment in need of a filth clean. If you’re not sure then please send us pictures or describe your home. There’s no charge if we walk out.
Filth cleaning is for extremely dirty and messy apartments. We would send you two Wizards for $100 an hour. They would bring all the equipment they need, including a vacuum cleaner and paper towels. You are welcome to set a maximum time you allow them to stay (say, your budget is $200 and no more) but please be realistic about the time. (You should expect one Wizard to spend about 1,5 in the bathroom, and the other to spend about 2 hours in the kitchen.)”
I’m getting this weird mental image of two perfectly able bodied people living in filth b/c they’re too dumb or entitled to figure out how to clean an apartment, and they need a friend to figure out how to hire a cleaning person. Seriously, what is WRONG with people? Suck it up buttercup and clean your f-in apartment or find someone who will – don’t go all woe is me to your friends. I know I’m edging into cranky old man territory here but sometimes I fear for the future of this country.
@Milkster, why don’t you hire whatever troll is spending their time thumbs downing even my most innoculous comments. They obviously need a job… and a life.
Things are different in NY than Chicago. I am unclear that any economic recovery is hitting Chicago other than for the top 2% of households or so.
River north prices (i guess that is the top 2% of households) have sky rocketed since winter 2011. Barely can see any places going for < 250$sqft anymore while that was plentiful this past year. Foreclosures are pretty much nonexistent or they are snapped up by home buyers/investors within a week or so. It's crazy,
http://www.redfin.com/homes-for-sale#!lat=41.89891464646773&long=-87.61810421685789&market=chicago&max_price=700000&num_baths=2.0&sf=1,2,3,4&status=130&uipt=5,4,3,2,1&v=8&zoomLevel=15
Look how many new listings are snapped up/contingent/pending in under 10 days.
The market has responded big time, at least in River North.
” I know I’m edging into cranky old man territory here but sometimes I fear for the future of this country. ”
Yeah, exactly – I worry about the future of this country too with all the illiterate adults like you who can’t READ that they just moved into the apartment and it was dirty from other people’s filth. What I also didn’t say is that they both work around the clock. But you sound like a self-righteous, judgmental asshole with no friends who wouldn’t know what it’s like to want to help someone just because.
Thanks, Anon –
I e-mailed you, btw 🙂
nobody beats the wiz
anon (tfo) (September 19, 2012, 4:24 pm)
Milkster:
No idea if they’re actually any good (and they only go to 110th, so may not work), but:
http://www.wizardofhomesnyc.com/
No, that’s pretty much exactly how I read it Milkster. Stand by my comments, as I’ve had to clean up some truly foul apartments for myself and my friends prior to / during move in, and while it certainly sucks it’s not some impossible task. If you don’t have time to deal with the mess, don’t rent the apartment. You sound like a good friend if it is truly that difficult to find help in NYC – I guess I’m finding it hard to believe that they need to outsource hiring a cleaning service, but just as you know nothing about me, I know nothing about them.
check this story out: http://www.chicagomag.com/Radar/Deal-Estate/September-2012/Why-Another-Homeowner-Converted-to-Renting/
From Rodkin’s story: “Posner believes that landlords will be prohibited from jacking up rents as much as property taxes demand.”
So, she thinks that the city will–essentially–confiscate all rental property to cover pensions? Is she on drugs, or just that dumb?
“From Rodkin’s story: “Posner believes that landlords will be prohibited from jacking up rents as much as property taxes demand.””
“So, she thinks that the city will–essentially–confiscate all rental property to cover pensions? Is she on drugs, or just that dumb?”
Couldn’t they be “prohibited” by market forces? Are you saying you know that rents will nec go up by the *full* amount of a property tax increase?
Also, do you think a major increase in property taxes would have any effect on the market prices of rental properties?
“Couldn’t they be “prohibited” by market forces? Are you saying you know that rents will nec go up by the *full* amount of a property tax increase?”
You know as well as I do that that phrasing does not convey, nor even imply, that. Were she a UofC economist–or even a trader–maybe, but then I would have just asked about a drink issue, bc its still bizarre word choice to convey that.
“do you think a major increase in property taxes would have any effect on the market prices of rental properties?”
A $0.25 increase in property taxes affects the market value of rental properties. But, of course, that’d be how the city effectively confiscates them–if the increases in taxes make the property worth less than the next tax installment, then there’s no point in paying the taxes (barring personal gty of the mortgage).
“You know as well as I do that that phrasing does not convey, nor even imply, that.”
It’s not like it’s even allegedly a quote. Also, what’s left unsaid but could legitimately be on her mind is that if it does get substantially reflected in taxes, as a renter she can always up and leave.
“its still bizarre word choice to convey that.”
Kinda agree though people certainly talk about the “market forces preventing” and they’re kinda synonyms. And again not clear her word choice.
“A $0.25 increase in property taxes affects the market value of rental properties.”
If mkt value goes down, so do rents generally, all else equal? So even if the 25 cents itself were fully passed in rent (in the sense of rents exactly equaling carrying costs and operating costs incl prop taxes), rent would not increase by full amount w adjustment to new mkt value?
“If mkt value goes down, so do rents generally, all else equal?”
But we already are assuming another variable going up. Which is why the values are going down. And if rent is held constant,but taxes are going *way* up, then mkt value can rapidly approach zero, *esp* in an environment that is likely to be more inflationary overall.
My thinking is that Dennis was trying to soften her suggesting that rent control would come, if propety taxes go way up. The thought of rent control coming to Chicago is crazy, imo.
If rents get too high then kids will stay at home with their parents. It’s not like Chicago has a lack of rental units or is constrained by geography like NYC. Hipsters are moving to Bridgeport a lot lately bc Logan and Pilsen are too expensive.
“My thinking is that Dennis was trying to soften her suggesting that rent control would come, if propety taxes go way up.”
I liked the article and see the statement that was trying to be made, w/o reading too much into it.
they only assumption that irks me is that she assumes that taxes will magically sky rocket if pension blah blah. first no illinois politician will let a crazy jump happen all at once or ever over 3 years, as they know they wont be in office when election come around. second is you will see a mass exodus out of illinois. third they are more creative than just raising property taxes it will be a many prong approach to getting the money to cover expenses, and in a way where you will think hey this is higher but not that bad it will be all the other *taxes that you wont really see but will feel and not know why. just look at the tollway price hike two major ones in just one decade? coincidence?
“If rents get too high then kids will stay at home with their parents. It’s not like Chicago has a lack of rental units or is constrained by geography like NYC. Hipsters are moving to Bridgeport a lot lately bc Logan and Pilsen are too expensive.”
that COULD be the savior of the housing market… most parents don’t want their dipshit hipster kid living in their basement… maybe, MAYBE to get them out of there they will say “go find a house and i’ll provide the down payment just do get you the hell outta here!” ” P.S. get off the computer and go find a job you dipshit! and stop spending all your money on tatoos and piercings and idiotic fashion trends!”
“But we already are assuming another variable going up. Which is why the values are going down.”
Yeah fair enough. Was just saying that even if you thought that rents were fully passed through, if you thought taht values would go down, then that alone would cause the rent to not increase by full value of the tax increase. But you should prob question whether prop values would go down if rents were fully passed through (to an approximation). Better way to say it is prob that if you thought values would go down, that itself is telling you that the future stream of income is less, so that property taxes are not fully passed through in rents.
“And if rent is held constant,but taxes are going *way* up, then mkt value can rapidly approach zero, *esp* in an environment that is likely to be more inflationary overall.”
Fully agreed.
“My thinking is that Dennis was trying to soften her suggesting that rent control would come, if propety taxes go way up.”
I really dunno. Posted a Q for Rodkin. Teh big benefit for her is not owning the home, assumign that home prices do not yet reflect this expectation. Whether rents go up or whatev, she can always bail and move. I’d guess she understands that part of it pretty well even if she doesn’t articulate it perfectly.
“she assumes that taxes will magically sky rocket if pension blah blah”
Well, that’s another flaw in her thinking.
“Hipsters are moving to Bridgeport a lot lately bc Logan and Pilsen are too expensive.”
But that woman isn’t moving out of her comfort zone, no matter what. She might move to Florida, but she’s not even moving to LP or the SLoop.
“second is you will see a mass exodus out of illinois”
THIS.
“I’d guess she understands that part of it pretty well even if she doesn’t articulate it perfectly.”
She was in PR. I assume (contrary to all evidence) that PR people convey what they mean.
The alternative, of course, is that it’s a piece of her rationalizaton after she lost (a claimed) $750k on her condo.
“The alternative, of course, is that it’s a piece of her rationalizaton after she lost (a claimed) $750k on her condo.”
thats called the “how much a month” thinking that the US has fallen into.
she took a 750k loss and is now paying a 2,600 *loss on her apartment
Once again there was a strong showing year over year for September. Sales in Chicago were up 23.2% while contract activity continues to grow faster than actual closings – up 36.9% even after allowing for a 20% failure rate. I’ve got more details here including inventories and % distressed sales:
http://www.chicagonow.com/getting-real/2012/10/7th-straight-month-of-double-digit-home-sale-gains-for-chicago/
Gary, I think this is having a positive affect on prices. Recent sales prices in my non-GZ area of the City are definitely higher than this time last year. Homes are selling much faster as well.
No doubt. The inventory situation is dreadful for buyers right now. I’ve got buyers waiting for stuff to come on the market. And I will probably do a blog post on this soon but you can see that the sold market times are plummeting. It’s a great time to be a listing agent because it’s never been easier to sell a reasonably priced property and then you go around and tell everyone how fast you can sell their property and they think you have special powers.
So in this environment there is definitely upward pressure on prices and I wouldn’t be surprised to see Chicago report it’s first year over year price increases for SFHs in 5 years very soon.
According to Zillow (lol) rents are up 31% y/y in my building? That doesn’t seem right….
“So in this environment there is definitely upward pressure on prices and I wouldn’t be surprised to see Chicago report it’s first year over year price increases for SFHs in 5 years very soon.”
I agree, I also should have clarified that I was referring to SFHs not condos.